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How Smart TVs Will Alter Small-Business Advertising Strategies

Despite being the "gold standard," TV advertising has been clumsy, lumbering and only useful for the biggest brands. But we are at the beginning of a radical change.
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2015-08-05-1438806012-8952272-RaoulDavis.jpgAuthor Raoul Davis specializes in helping CEOs increase their visibility, revenues, and industry leadership status through a proprietary CEO branding model. He is a partner at Ascendant Group, a proven top line revenue growth strategy firm through utilizing the power of CEO branding. Ascendant integrates brand strategy, PR, speaking engagements, book deals, social media and strategic networking to accelerate visibility.

In my brand strategy work with CEOs of midsize companies and other small businesses, we have swayed clients away from big television spends. We've also pushed visibility via organic traffic through PR and social media. Despite being the "gold standard," TV advertising has been clumsy, lumbering and only useful for the biggest brands. But we are at the beginning of a radical change.

The "intelligence" of the smart TV will allow consumers and their families to sync the system to their preferences. According to Yang Dongwen, CEO of Skyworth, a multibillion dollar electronics company, the goal is "to create a smart home platform based on research for every family member. This will integrate aspects of online and offline features based on how they are used in daily routines." Consider a TV that will turn on the morning news as soon as it senses the coffee maker is on; that will remember you're interested in say, British history, and offer you shows based on your interests in real time. The future of smart TV advertising depends on working with the user. And the overall result is a much happier consumer who hopefully won't reach for the mute button next time your commercial is on.

Instead of the current model of targeting a narrow audience, imagine a lighter, more cost-effective footprint that provides sniper-like accuracy. In a recent article on CMO.com, Graeme Hutcheson, head of Sky AdSmart, says, "This dynamic works not only on a geographical level, where an advertiser could advertise to audiences in a specific location, but also on an audience profile level. This dramatically lowers the entrance cost for TV advertising." According to tdgresearch.com, in 2012, 159 million homes had at least one smart TV. In 2017, 510 million homes are projected to have the same amount.

With more and more viewers opting to watch recorded, on-demand content, and networks adapting to the changes that services such as Netflix, Hulu, Amazon Prime and others have brought about, a new era of targeted advertising is on the horizon, empowered by smart TVs. Gone are the days of tuning in at 6 p.m. to find your favorite show, interspersed with long streams of impersonal, corporate commercials from pizza companies, automakers and drug companies meant for mass audiences. The smart TV works perfectly with on-demand content and is usually synced to in-depth personal information. While advertising has yet to catch up to the opportunities this represents, the future of smart TV may forever change how you promote your business.

A Pay-Per-Click Style Ad-Based Platform

While Google wasn't the first to introduce a pay-per-click (PPC) ad market known as AdWords, it has certainly earned its reputation as the most well-recognized. Nowadays, many advertisers diversify their media buys with YouTube real estate; our clients, for instance, often utilize YouTube's promotional platform to generate more brand visibility. Smart TVs could allow carefully selected brand association and commercial time, which would be much more expensive to obtain through a regular TV network. In fact, the YouTube of seven years ago is all but nostalgia: a mélange of homemade videos of kids taking their first steps and dogs chasing their own tails. Almost all of the top 100 YouTube videos now are professional productions with six-to-seven-figure budgets.

Smart TV promises the possibility for a similar platform. Imagine being able to bid in real time for TV ad space and having content automatically assigned to shows that are thematically most relevant to your brand. You can target by geographic location, age, gender, income and other key demographics. Commercials can have clear calls to action via smart TV, such as requests to click through to sites, take advantage of temporal offers in real time and much more.

What Smart TV Advertisements Mean for Branding and Social Media Firms

This puts firms like ours that are in branding and social media in an interesting place. We built our business model knowing that typical advertising methods are inefficient. When it came to targeting an audience through video messaging, YouTube was always the best answer. YouTube allows you to create organic interest, leverage other social networks and use a powerful ad platform to accelerate views.

In the immediate future, smart TV will become better targeted than YouTube. This gives ad agencies a leg up because of their existing understanding of the advertising world. It also means that social media firms ought to do their homework and start offering this option to their clients.

I implore CEOs, CMOs and entrepreneurs to begin planning for this next cycle of marketing. Like every medium, the early adopters will have an advantage over their competition. In today's fast-moving business climate, any advantage you can get is meaningful. So whether you're experienced with advertising and wish to expand or you've been disappointed by other outbound marketing channels, consider this a relatively undiscovered and worthwhile opportunity.

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